The South China Morning Post's Tai Po office. Photo: May Tse
Source:
https://scmp.com/news/hong-kong/economy/article/1891040/south-china-morning-post-valued-hk206-billion-sale-alibaba Hong Kong economy
South China Morning Post valued at HK$2.06 billion in sale to Alibaba Group: Special cash dividend to shareholders
A special cash dividend has been offered to shareholders in the SCMP Group upon its purchase by the Alibaba Group
The deal between SCMP and Alibaba will bring a one off dividend to investors. Photo: Supplied
Alibaba Group, China's e-commerce giant, has agreed to pay HK$2.06 billion for the South China Morning Post and all other media assets owned by SCMP Group.
After the signing of the sale and purchase agreement on Friday, SCMP Group said yesterday that it planned to use "a very substantial proportion" of the proceeds to distribute a special cash dividend to its shareholders and keep the remaining balance as working capital.
This means Malaysian tycoon Robert Kuok, who holds 74 per cent of SCMP Group through Kerry Group, and the other substantial shareholder, Silchester International Investors, will be the key beneficiaries of the special cash payouts.
Kuok bought a 34.9 per cent stake in SCMP Group for about US$349 million (HK$2.69 billion) from Rupert Murdoch's News Corp in 1993.
The sale to Alibaba will generate a one-off gain of HK$1.42 billion for SCMP Group.
SCMP Group will be reorganised to hold a portfolio of investment properties including the Post's existing office at Yue King Building on 1 Leighton Road and an attached advertising billboard, office spaces at the Bank of America Tower in Central, the Ko Fai Industrial Building in Yau Tong, the Sea View Estate in North Point and the Clear Water Bay Studio on Clear Water Bay Road, Hang Hau.
SCMP Group said it would ensure the media business would have HK$20 million in working capital net of borrowings upon the completion of the sale.
The assets at stake include English-language newspapers the South China Morning Post and the Sunday Morning Post, magazines and related print and digital publications, recruitment, outdoor media, events and conferences, education and digital media businesses.
Joseph Tsai, executive vice chairman of Alibaba Group, said last week that the deal would combine Alibaba's digital strength with the South China Morning Post's editorial excellence, paving the way for the 112-year-old newspaper to transform into a global media entity specialising in China coverage for readers around the world.
The media assets recorded a HK$122.56 million profit after tax last year, a 12 per cent rise from 2013, on 8.4 per cent higher turnover at HK$1.2 billion last year.